Human Resources 101. Audit and Best Practices in Key Areas of HR Function

Transcription

1 Human Resources 101 Audit and Best Practices in Key Areas of HR Function

2 What is an HR Audit? Process of examining policies, procedures, documentation, systems and practices with respect to the HR function. 1

3 Why conduct an HR Audit? Reveals strengths, weaknesses and issues needing resolution End goal is to keep bank compliant avoid any exposure 2

4 Areas of Review Compliance Function Specific Policies, Procedures & Best Practices 3

5 Compliance with Current Laws I 9 s ADA W 4 s FMLA EEO Minimum Wage/Fair Wage FLSA Affirmative Action 4

6 Common Compliance Concerns I. Form I 9 documentation and possible discriminatory practices II. FLSA misclassification III. Required compliance reporting IV. Placement of information in employee files and document retention 5

7 Section I I 9 Forms, Procedures & Compliance 6

8 Form I 9 Establishes a worker s identity and authorization to work in the U.S. Section I completed by first work day Use most recent version of form required 7

9 Preventing Discrimination in I 9 Process Section 2 An employer must allow the employee to present his or her choice of documentation to complete form An employer may not ask for specific or more documents, or reject a valid document Note : original documents provided must be physically inspected (does not have to be same person running E Verify) 8

10 Completion of I 9 Process Employer c0mpletes verification (Section 2) by three business days after first day of work for pay Person reviewing documents should complete Section 2 9

11 Monitoring Agencies Monitors employers who knowingly violate or circumvent the I 9 process Created Immigration and Customs Enforcement (ICE) Investigates discriminatory practices and charges filed by injured parties Created Office of Special Council (OSC) Civil Rights Division 10

12 E Verify Program An electronic program that verifies an individual s permission to work in the U.S. 11

13 Preventing Discrimination in E Verify Process Do not use E Verify to pre screen employees in any way E Verify does not permit employers to ask for specific documents during the I 9 process Delay E Verify if employee has not yet received SSN and run through E Verify only after they receive their SSN 12

14 I 9 Internal Audit How to complete? Select time of review may be completed same time annually Run report of new hires within time frame (or baseline audit for current staff) Review selected I 9 s for completion of all sections Identify any forms that may need corrections Attach any notes to explain corrections Source for audit process SHRM I 9 Audit Checklist and SHRM How to Conduct an I 9 Audit dated 5/29/

15 I 9 Storage and Purging I 9 s should not be a part of employee personnel file No indication of immigration status should be in personnel file Current I 9 s may be stored electronically or in one main binder for review Must retain terminated employee s I 9 for three years from DOH or one year from termination, whichever is later Best practice to select date to purge annually 14

16 I 9 Compliance Be prepared complete, maintain and destroy your Form I 9 s and have a written I 9 policy in place assuming that your company will be subject to a Notice of Inspection by Immigration and Customs Enforcement in the near future an ounce of prevention will allow your bank to avoid paying fines 15

17 Resources for I 9 Compliance READ the Handbook For Employers M 274 KEEP I 9 CENTRAL on desktop link to E Verify 16

18 Section II FLSA Misclassification 17

19 FLSA Misclassification Review of Independent contractor relations Use IRS 20 Factor Test, Independent Contractor or Employee? Performing same duties as current employees? 18

20 Contractor Misclassification Possible Fines Unintentional infraction $50 for each W 2 not filed penalty of 1.5% of total wages not reported payment of employee and employer FICA Interest accrued daily from date taxes should have been deposited Failure to Pay penalty monthly fine up to 25% of total tax liability Fraud/intentional misconduct assess additional penalties by IRS 19

21 FLSA Misclassification Employees are properly classified as exempt or non exempt Use salary basis threshold and duties test to determine status Use updated job descriptions to determine if duties qualify Updated salary basis effective Dec. 1,

22 Employee Misclassification Possible Fines Back overtime wages (2 3 years) Back taxes on wages, penalties, interest, attorney fees and court costs Liquidated damages=amount of unpaid wages Willful violation may include up to $10K penalty 21

23 Section III Compliance Reporting 22

24 What is Equal Employment Opportunity (EEO)? Provides for jobs and services to be open and available to anyone who qualifies, regardless of race, color, religion, sex, national origin, veteran status, pregnancy, age or disability (or protected classes) People should be selected for jobs based on their jobrelated knowledge, skills, and abilities 23

25 Compliance with EEO law Employees with 15 employees or more would develop program to uphold Title VII: Includes employer s statement of commitment to upholding equal opportunity Posting of EEO: It s the Law poster accessible to all applicants and employees Develop policies and procedures to comply in all employment practices Provide training to employees and managers 24

26 What is the EEO I Report? Collects data to report the gender and race/ethnicity of your workforce by location in one report Required to file annually Allows employees to self identify 25

27 Who needs to file EEO 1? Private employers 100 or more employees (FT & PT, not equivalents) All federal contractors 50 or more employers (FT & PT, not equivalents) 26

28 Are Banks considered Federal Contractors? Yes under the Supply and Service Contractor provisions of the Dept. of Labor if they meet the following: have 50 or more employees (FT & PT) are insured by FDIC (considered government contract) serve as a depository of Federal funds in any amount; or is an issuing and paying agent for U.S. savings bonds in any amount 27

29 EEO 1 Annual Reporting File electronically by September 30 th annually Keep identification records for 2 years from filing Use findings to educate managers, executives and board on recruitment endeavors 28

30 Penalties for Non Compliance In June 2016, EEOC announced an increase for failure to post the most recent EEO is the Law poster from $210 to $525 per violation, a 150% increase Employer could be subject to court order to compel to report False reporting could result in fines or imprisonment 29

31 Non Compliance If a discrimination charge is filed against your bank with the EEOC, the agency may check to see if report was filed Could negatively influence the investigator s opinion of the bank 30

32 Recent EEOC Proposal Proposal of annual collection of pay data along with demographics 12 bans of pay grades Proposed in Feb, 2016, currently in review If approved, would affect 2017 reporting 31

33 What is Affirmative Action (AA)? Affirmative Action requires that federal contractors take proactive steps to provide equal employment opportunities to minorities, women, individuals with disabilities and veterans in protected categories. AA requires a written action plan to target outreach efforts to facilitate hiring employees from diverse backgrounds. 32

34 Annual AAP Compliance Employer can determine 12 month reporting period for outreach efforts Use data from prior 12 months Plan should include data reporting for minorities and women, disabled and protected veterans Retain records and reports for 2 years after close of plan year Communication of recruitment efforts and results to managers, executive and board members 33

35 Penalties for Non Compliance OFCCP selects target audits annually by reviewing company data on EEO I Severe money penalties and government intrusion 34

36 Vets 4212 Form Replaces VETS 100 new designations of protected Veterans Required for 50 or more employees of a bank/federal contractor Submit annually by 9/30 Retain reports and records for 3 years after last report filing 35

37 Form 5500 Types of plans subject to annual reporting to IRS and ERISA: employer sponsored plan such as 401(k), profitsharing, stock bonus plans, annuity & pension welfare plans such as medical, dental, life insurance, vision, disability, etc. 36

38 Form 5500 Employer Sponsored Plans ERISA Form 5500 was created so the government can assess the financial condition, investments, and operations of all employee benefits plans Must be filed annually for all 401(k), pensions and retirement plans regardless of number of participants Filed electronically no later than 7 th month after plan year ends 37

39 Form 5500 Welfare Plans Required for plans that cover 100 or more participating employees at beginning of plan year Required whether fully insured, funded or partially funded plan Can file a wrap plan submission that contains all defined welfare plans Filed electronically no later than 7 th month after plan year ends 38

40 Penalties for Non Compliance DOL & IRS can assess penalties for non compliance, incomplete forms or failure to file Can assess penalties of up to $1,100 per day for each day administrator fails to complete IRS can impose civil penalties for certain incomplete reporting ERISA provides for criminal penalties for willful violations 39

41 Penalties for Non Compliance DOL has program for non filers called Delinquent Filer Voluntary Compliance (DFVC) program Encourages benefit plan administrators to voluntarily file overdue annual reports and pay a one time only reduced civil penalty 40

42 Required Annual Reporting EEO 1 and VETS 4212 Affirmative Action Plan for women & minorities, individuals with disabilities and protected veterans Form 5500 for pension and welfare plans 41

43 Section IV Personnel Files: What to Retain, Where and How Long? 42

44 Employee Records Compliance Awareness Limit access to those with a need to know Protection of applicants and employees from discrimination Identity theft Breach of privacy HIPPA violations 43

45 Employee s Personnel File Secured file that contains information documenting all aspects of employee s performance including promotions, transfers, compensation changes, performance evaluations and any disciplinary actions Separate Files include: I 9 Forms EEO/AA records Pre hire records Medical records/leave info Worker s Comp/Accident Garnishments/pay records Investigation files Safety records 44

46 Employee Record General Guidelines Manager s should only have access to information needed to assist in making employment decisions Should be a policy or consistent practice regarding employee access to their file Retain original docs if available scanned docs are admissible If manager files are allowed, training should take place on proper controls Manager files are discoverable in a lawsuit 45

47 Employee Record Retention Hiring Decisions 2 yrs. satisfies ADEA, ADA, EEO Payroll records 3 yrs. satisfies ADEA, FLSA, EPA Tax records 4 yrs. satisfies FICA & FUTA FMLA claims 3 yrs. satisfies FMLA I 9 Form 3 yrs. after DOH of term EE or 1 yr. after termination 46

48 Reporting Retention EEO 1 AAP Vets 4212 FORM 5500 Federal/state tax reports 2 years after report filing 2 years after close of AAP year 3 years after report filing 6 years after report filing 4 years after report filing 47

49 All Areas of HR Functions Hiring Practices Pay Practices Employment Policies Performance Benefits Employee Discipline & Termination Records Retention Annual Reporting 48

50 After an Audit What s Next? Are there potential liability concerns? Are there processes that need tweaking and/or training to take place in order to comply? Where legal issues are concerned, best action is to consult with attorney 49

51 QUESTIONS?????????????????????????????????????????????????????????????????????? 50

52 Contact Info Debbie Barnewold